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Tax question for rental property
Posted on 4/4/16 at 10:17 pm
Posted on 4/4/16 at 10:17 pm
I bought a rental property in August of 2015. I made roughly 15k in repairs and have all invoices / receipts. Also have down payment interest and insurance receipts. What can I deduct if anything? The property generated 0 income in 2015
6
Posted on 4/4/16 at 11:20 pm to FratAU
The IRS classifies renting out property as a passive activity unless you're a full-time real-estate professional. You can't deduct passive losses from non-passive income, only from other passive income. If you have a couple of rentals and one of them is in the red, for instance, you can write off the loss from one house against the gain from the other. If the grand total of all your passive activity is a loss, you have to carry it forward.
LINK
LINK
Posted on 4/5/16 at 7:42 am to FratAU
If your Modified AGI is less than $100,000 ($50,000 if MFS) then you will be able to deduct up to $25,000 in rental loss against ordinary income.
If your Modified AGI exceeds $100,000, then your loss is reduced by 50% of the amount that your MAGI exceeds $100,000.
Ex: 15,000 rental loss, $120,000 MAGI
120,000 - 100,000 = 20,000
20,000 x 50% = 10,000 reduction in rental loss
If your Modified AGI exceeds $100,000, then your loss is reduced by 50% of the amount that your MAGI exceeds $100,000.
Ex: 15,000 rental loss, $120,000 MAGI
120,000 - 100,000 = 20,000
20,000 x 50% = 10,000 reduction in rental loss
This post was edited on 4/5/16 at 7:44 am
Posted on 4/5/16 at 8:03 am to FratAU
Go talk to a tax professional. The repairs you made will likely have to be capitalized, and that will require a review to determine if the costs were repairs, renovations or improvements. There is also the issue of the date you placed the house in service as a rental. You may not have anything to report for 2015.
Posted on 4/5/16 at 9:20 am to FratAU
If I were you, I'd be paying an accountant with good investment property experience for the advice and guidance you seek. I say that because I absolutely think its too important to take a chance screwing up.
Posted on 4/5/16 at 10:59 am to Zilla
agreed
This post was edited on 4/5/16 at 11:09 am
Posted on 4/5/16 at 6:08 pm to FratAU
Strongly recommend using a pro for the first year or two. That's what I did when I bought my rental.
I've never dealt with unoccupied periods so I can't help with your situation.
I've never dealt with unoccupied periods so I can't help with your situation.
Posted on 4/5/16 at 7:59 pm to FratAU
What type of repairs did you make? This will make a difference as the rules have changed the last few years. Another thing to note is when was the property available for rent. Are you self renting or using a managment company?
Posted on 4/5/16 at 9:44 pm to Savoiecorey
I'd definitely hire a professional CPA. I would think that most of those repairs would go into the total value of the house that would then be depreciated over 27.5 years. Other costs may go as a loss but as others have said it may depend on when your began renting it.
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